Monday, May 02, 2011

The House Commerce Committee's Subcommittee on Communications and Technology has scheduled a hearing for Tuesday, May 3, on FCC process reform, and all five commissioners are to testify. FCC regulatory reform is certainly fertile ground, and I hope the committee is gearing up to do some serious plowing. [Just as I am about to post this, I see that the Subcommittee apparently has postponed Tuesday's hearing.]

In a piece entitled "Rolling Back Regulation at the FCC" published on April 18 in National Review Online, I suggested a modest change to the Communications Act, in the nature of a process reform, that could go a long way towards effectuating Congress's intent that the Telecommunications Act of 1996 be implemented in a deregulatory way. I explained that two entirely new provisions in the 1996 Act – the forbearance and periodic regulatory review provisions -- were intended by Congress to be primary tools for reducing regulation as competition developed, but that both have largely failed of their purpose. (For further detail, see my April 7 FSF Perspectives piece, "A Modest Proposal for FCC Regulatory Reform: Making Forbearance and Regulatory Reform Decisions More Deregulatory.")

In order for the forbearance and regulatory review provisions to achieve their intended purpose, I proposed that both be amended by incorporating an evidentiary standard that, in effect, would establish a deregulatory presumption. The Commission would be required to presume, absent clear and convincing evidence to the contrary, that the consumer protection and public interest criteria in the two provisions have been satisfied. The substantive criteria relating to consumer protection and the public interest would not be altered, and the revision would not dictate the outcome of any particular regulatory relief proceeding. But with the rebuttable presumption in place, the FCC would bear a considerably steeper burden in order to retain legacy regulations in the face of competition. Surely this is what Congress had in mind when it directed the agency in the regulatory review provision to determine whether a regulation is "no longer necessary in the public interest as a result of meaningful economic competition between providers of such service."

Now a point of clarification. In suggesting the forbearance and regulatory review provisions be amended to incorporate a deregulatory presumption by virtue of inclusion of the "clear and convincing" evidentiary standard, I did not mean to suggest that all entities regulated by the Commission should not be able to avail themselves of these provisions for regulatory relief. I was primarily focusing on the mechanism for achieving the deregulatory goal, not the scope of coverage. But to be clear: The two provisions should be revised so that all entities subject to Commission regulations are included, say, by adding "and a multichannel video programming distributor and any other regulated entity" after "telecommunications carrier," and "multichannel video programming service and any other service regulated by the Commission" after telecommunications service, each time "telecommunications carrier" or telecommunications service" appears.

As I noted in my National Review piece, my proposal does not lessen the need for comprehensive reform of our communications laws. But, in the meantime, if adopted, the proposal could go a long way towards forcing the FCC to eliminate what President Obama called, in his recent executive order, "outmoded, ineffective, insufficient, or excessively burdensome" regulations.

I received many favorable responses to my proposal. Perhaps in the course of the hearing on FCC reform, Committee members can ask the FCC commissioners for their reaction to this idea, along with many others.